RBI approved the amalgamation of ING Vysya Bank with Kotak Mahindra Bank
With this approval of RBI, Kotak will come up as the country’s fourth largest private sector lender.
The Reserve Bank of India (RBI) on 1 April 2015 sanctioned the scheme of amalgamation of ING Vysya Bank Ltd. with Kotak Mahindra Bank Ltd. The Scheme will come into force with effect from 1 April 2015.
With this sanction, all branches of ING Vysya Bank will function as branches of Kotak Mahindra Bank with effect from 1 April 2015.
The Scheme was sanctioned in exercise of the powers contained in Sub-section (4) of Section 44A of the Banking Regulation Act, 1949.
This approval of RBI for the merger deal would create Kotak as the country’s fourth largest private sector lender after HDFC Bank, ICICI Bank and Axis Bank in terms of market capitalisation.
Also, the deal is the first major bank takeover since Bank of Rajasthan was amalgamated with the ICICI Bank on 13 August 2010.
About the Kotak and ING Vysya merger
Kotak Mahindra Bank’s shareholder approved the amalgamation of ING Vysya Bank on 20 November 2014. As per the deal
• 725 shares of Kotak will be swapped for every 1000 share of ING Vysya at a share exchange ratio of 0.725 : 1
• ING Vysya including its business and branches will be merged into Kotak
• Kotak will issue shares to ING Vysya shareholders
• All shareholders (that of Kotak and ING Vysya) participate thereafter in the (merged) Kotak business
On 23 February 2015, the 15000 crore rupees merger deal received approval from the Competition Commission of India (CCI).
ING Vysya Bank is an old private sector bank that was set up in 1930 whereas Kotak Mahindra Bank is a new private sector bank that came into existence in 2003.
Uday Kotak is the Vice-Chairman and Managing Director of the Kotak Mahindra Bank.